This report was commissioned by the American Council for Capital formation, and is interesting for a number of reasons, perhaps the most striking being that the title is contradicted by the data immediately following it.  The Special Report is titled U.S. Individual Capital Gains Tax Rates High but the bar graph immediately under that title indicates that, among nations who tax capital gains and income separately, the U.S. rate is among the lowest.

Several countries are listed with 0% capital gains taxes.  Most of them tax capital gains and income together at an extremely high rate.  For instance the Netherlands is listed as having a 0% capital gains tax on personal investment, but taxes all income in its highest bracket at 52%.

Germany is listed as having a 0% capital gains tax.  That’s not actually true.  Germans pay two separate taxes on both income and capital gains.

Of note:

Where the shareholder is an individual or a partnership, capital gains arising from the sale of shares held as business assets are taxable, but only 60% of the capital gain is added to the individual’s/partner’s annual gross income. The remainder is tax-free (40% participation exemption). Correspondingly, only 60% of the losses are deductible. Capital gains realised by partnerships are tax-free if reinvested in shares within two years (roll-over relief).

DIVIDENDs

Dividend income is subject to 25% withholding tax plus a solidarity surcharge of 5.5% of the tax due.

See more here, here and here.

Why would the commission list Germany as having a 0% capital gains tax when public information shows clearly that it does tax capital gains (quite a lot)?  And how difficult was it to simply gather this information from public sources and put it in a bar graph?  I could do that at home for free.

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